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The process of buying a new home can be quite confusing, especially for first-time buyers. Even if you’ve done it before, having a guide can be helpful as a refresher. Choosing your ideal home is a big decision, but there are several steps to complete before you get the keys, so being prepared is essential. If you're purchasing a newly built home, the process differs from buying a second-hand property, particularly with the advantage of avoiding lengthy chains. To help you navigate this journey, check out our handy guide!
Assess Your Financial Situation
Before you even start looking for homes, it’s important to work out the kind of budget you’ll have going into the search. If you have enough to buy outright, this will be easier; however, if you’re buying with a mortgage, you’ll need to determine how much you can borrow. Speak to a mortgage advisor if you’re looking to use this option, or start with a quick online mortgage estimate. When estimating your deposit, don’t forget to consider the additional costs you’ll incur when moving, such as stamp duty, conveyancing fees, surveys, inspections, and moving costs. If you have a mortgage broker in place, having a mortgage in principle showing how much a lender is willing to lend you will be useful when it comes to making offers.
Find a Home
We have plenty of tips on how to find your perfect home. Whether it’s about discovering the ideal location, or considering what factors are most important for a relaxing space. If you’re still unsure about buying a new build, you might benefit from understanding the advantages, such as lower energy bills.
Have a Home to Sell?
For those looking to sell their existing home before moving, obtaining a valuation and successfully selling your property is crucial for determining your financial capability and the type of home you can pursue. It’s advisable to have a firm offer on your current home before making an offer on a new one, as this provides more security for your financial situation. If selling your home feels overwhelming, many developers offer Part Exchange or Assisted Move schemes that can simplify the process of selling your old home.
Reserving Your New Build Home
Once you’ve found the home you love, it’s time to make an offer. Some developers are open to taking offers below the asking price, but it’s wise to be pragmatic about how much you’re willing to pay. If you have a decision in principle, once your offer is accepted, you can pay the reservation fee and reserve your home. If you don’t have a decision in principle, the developer can often recommend a mortgage broker who can help you obtain one, allowing you to make the reservation. The reservation fee is generally a small nominal amount that will be deducted from the final price when the sale goes through. You might also be reserving a home ‘off-plan,’ which means the following stages will take a little longer to complete!
Time for the Solicitors
At this point, you need to instruct a conveyancer to start the legal processes involved in your home purchase. If you already have a solicitor, you can proceed directly; if not, you may get a recommendation from the developer, but it’s also good to shop around and compare quotes. The conveyancer will organise the various legal stages of buying the home, including drawing up contracts, conducting searches, and corresponding with the Land Registry. They will also liaise with your mortgage company to arrange the financing of the purchase.
To Survey or Not to Survey
While a basic mortgage valuation survey will be conducted by the mortgage company to get your mortgage approved, you also have the option of obtaining more in-depth surveys of the property. Even if you’re buying a new build, it might be worth getting a basic condition survey and a snagging report. A surveyor will check for any structural issues you might not see, as well as evaluate the workmanship of the building to ensure there are no faults that might cause problems later. If any issues are discovered, it is the developer's responsibility to resolve them. Additionally, remember that a warranty will be in place after the purchase is made.
Buzz Words!
Many terms are thrown around during the buying process, and it’s worth knowing what they mean!
Exchange: This is the day when you pay your deposit and exchange contracts, generally handled by your conveyancer. At this point, the agreement becomes legally binding, and you become responsible for your new home, so you’ll want to sort out insurance by then.
Completion: Completion can happen immediately after the exchange, or there might be a period in between. Completion day is when the mortgage company handles the transfer of funds, meaning the sale has been completed, and you can get the keys and move in! If you’re looking for advice on handling the moving-in process, take a look at our blog for tips and tricks.
And you’re there! There are quite a few steps, but buying a new home is a significant step to take, whether you’re a first-time buyer, a second-stepper, or rightsizing. While the process can be lengthy, there’s plenty of help along the way from your mortgage broker, the developer, agents, and solicitor. They’re all eager to assist you in getting into your dream home as soon as possible. Having an understanding of the process from the outset can help you envision your end goal, making that special moment when you walk through your new front door even more rewarding!
